Restaurant Owner Asks Two Landlords for Rent Relief, Gets Two Very Different Responses

Michael Sauvage, owner of a pair of restaurants in Seattle, Washington, has summed up a major concern of the economic side of the COVID-19 crisis in a single quote.

“If the government shuts down your business,” Sauvage said. “You can’t be expected to pay rent. But the building owners can’t take the whole weight either. So where should the burden lie?”

Sauvage’s restaurants, both called BB’s Teriyaki, normally do most of their business with in-house dining. But following Washington’s shutdown of all dine-in restaurants, he’s lost nearly all of his sales. He still does take-out, but even demand for that is down.

“Our sales are off 80 percent,” Sauvage told the Seattle Times, who interviewed him while he personally was running a delivery to the UW Medical Center. “I’m trying to be creative and just hang on here.”

At one location, a building owned by an investment management firm worth nearly $70 billion, the response was that they would consider a one-month rent deferral only if he paid their unspecified legal fees to amend his lease.

“Firstly, please agree (via email) to cover [our] legal costs as we evaluate your requests. Initially this will be small dollars but would increase if they document a rent deferral arrangement.”

Remember, this company is worth billions and billions of dollars.

“I was so frustrated I couldn’t respond,” Sauvage said. “I’m a local small business trying to stay afloat and not lay off my workers. It’d be one thing if they just said ‘no.’ But we’re in the middle of a pandemic and it’s like they’re trying to make a buck off it.”

At his other location, a building in the University District owned by a local Seattle family, just asking the had his rent waived for April and May.

“In consideration of the effect COVID-19 has had on the economy, with the U District being particularly hard hit, the landlord will not be charging base rent,” said the email Sauvage received from the son of the original owner.

One of these locations will lose a tenant, and the other will probably not. And the actions of both landlords will be remembered in the future, in whatever form the post-COVID American economy takes.

Both landlords and tenants are suffering because of the Trump/COVID-19 recession. While April 1 came and went without widespread business rent defaults around Seattle, the same will probably not be true of May 1. “It seems like the government is going to have to intervene and figure this out,” Sauvage said.